Friday, January 6, 2017

Brexit: the Bank of England admits that its forecasts were too pessimistic –

The chief economist of the Bank of England (BoE) Andy Haldane has admitted to having been too pessimistic in its forecasts about the immediate consequences of the vote for the Brexit, referring to a more general crisis of the job of a forecaster.

“We had expected a slowdown of the economy that has not happened, as all the others, almost all of the other major forecasters,” said Mr. Haldane on Thursday evening during a conference organized by the research centre Institute for Government. He believed that the good performance of the british economy in recent months was “a surprise”, admitting that his profession was consistently disappointed in recent years, particularly in not seeing coming the financial crisis of 2008. “It is true to say that the profession is, in some measure, in crisis,” he said.

activity surprisingly resistant

The economist was questioned on why the BoE had predicted hard times for the british economy immediately after the vote for the Brexit, which is ultimately not produced. The activity in the country shows a great resistance since the referendum at the end of June, so that growth of the gross domestic product is expected to exceed 2% in 2016, even if the economists and the government expect a hole of air in 2017.

“Is it that we think that the (current economic climate) going to last ? I would say that it is reasonable to think that this year could be somewhat more difficult for consumers than last year”, he explained. Not only the purchasing power of households could suffer from the surge in inflation following the fall of the pound, but companies will likely be hesitant to hire and invest due to the uncertainties associated with the negotiations on the Brexit, the launch of which is expected by the end of march.

(With AFP)


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